v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is estimated for each class of financial instrument based on the framework established in the fair value accounting guidance. Fair value is defined as the price in the principal market that would be received for an asset or paid to transfer a liability to facilitate an orderly transaction between market participants on the measurement date. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value.
The three levels of the fair value hierarchy are defined as follows:
Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets.
Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.
Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement.
Fair values of the Company's investment portfolio are estimated using unadjusted prices obtained by its investment accounting vendor from nationally recognized third-party pricing services, where available. Values for U.S. Treasuries, exchange-traded funds and common stocks are generally based on Level 1 inputs, which use quoted prices in active markets for identical assets. For other fixed-maturity securities and non-redeemable preferred stock, the pricing vendors use a pricing methodology involving the market approach, including pricing models which use prices and relevant market information regarding a particular security or securities with similar characteristics to establish a valuation. The estimates of fair value of these investments are included in the amounts disclosed as Level 2. For those investments where significant inputs are unobservable, the Company's investment accounting vendor obtains valuations from pricing vendors or brokers using the market approach and income approach valuation techniques and are disclosed as Level 3.
Management performs several procedures to ascertain the reasonableness of investment values included in the condensed consolidated financial statements, including 1) obtaining and reviewing internal control reports from the Company's investment accounting vendor that assess fair values from third party pricing services, 2) discussing with
the Company's investment accounting vendor its process for reviewing and validating pricing obtained from third party pricing services and 3) reviewing the security pricing received from the Company's investment accounting vendor and monitoring changes in unrealized gains and losses at the individual security level. The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs.
The following tables present the balances of assets measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025, by level within the fair value hierarchy:
September 30, 2026
Level 1Level 2Level 3Total
(in thousands)
Assets
Fixed-maturity securities:
U.S. Treasury securities and obligations of U.S. government agencies
$838 $— $— $838 
Obligations of states, municipalities and political subdivisions
— 78,752 — 78,752 
Corporate and other securities— 1,732,012 — 1,732,012 
Asset-backed securities— 531,269 — 531,269 
Residential mortgage-backed securities— 1,655,788 — 1,655,788 
Commercial mortgage-backed securities— 498,666 — 498,666 
Total fixed-maturity securities838 4,496,487 — 4,497,325 
Equity securities:
Exchange-traded funds240,265 — — 240,265 
Non-redeemable preferred stock— 12,788 — 12,788 
Common stocks526,180 — — 526,180 
Total equity securities766,445 12,788 — 779,233 
Total$767,283 $4,509,275 $— $5,276,558 
December 31, 2025
Level 1Level 2Level 3Total
(in thousands)
Assets
Fixed-maturity securities:
U.S. Treasury securities and obligations of U.S. government agencies
$874 $— $— $874 
Obligations of states, municipalities and political subdivisions
— 127,860 — 127,860 
Corporate and other securities— 1,713,888 — 1,713,888 
Asset-backed securities— 588,519 — 588,519 
Residential mortgage-backed securities— 1,459,270 — 1,459,270 
Commercial mortgage-backed securities— 451,039 — 451,039 
Total fixed-maturity securities874 4,340,576 — 4,341,450 
Equity securities:
Exchange-traded funds185,523 — — 185,523 
Non-redeemable preferred stock— 24,100 — 24,100 
Common stocks416,776 — — 416,776 
Total equity securities602,299 24,100 — 626,399 
Short-term investments3,864 — — 3,864 
Total$607,037 $4,364,676 $— $4,971,713 
There were no assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2026 or December 31, 2025.
The carrying amount of the Company's fixed-rate senior notes was $175.0 million, less debt issuance costs, and the corresponding estimated fair value was $163.4 million and $173.8 million at September 30, 2026 and December 31, 2025, respectively. The fair value measurement was determined using a discounted cash flow analysis that factors in current market yields for comparable borrowing arrangements under the Company's credit profile. Since this methodology is based upon market yields for comparable arrangements, the measurement is categorized as Level 2. The estimated fair value of outstanding borrowings under the Company's revolving Credit Facility approximated its carrying value at September 30, 2026 and December 31, 2025. See Note 13 for further information regarding the Company's debt arrangements.
The Company holds cash equivalents that are managed as part of its investment portfolio and, due to the short-term maturities of these assets, the carrying value of these investments approximates fair value. The Company held cash equivalents of $58.1 million and $45.3 million at September 30, 2026 and December 31, 2025, respectively.